Boris unveils multi-million pound initiative for London property

Tuesday, 3 March 2009 2:16 PM

Boris Johnson, the Mayor of London, today unveiled a multi-million pound initiative to kick-start the capital's property market.

Developed alongside the Homes and Communities Agency (HCA), the aim is to provide 3,000 new affordable homes, and to promote the mayor's new First Steps initiative.

The scheme aims to provide low cost affordable housing in a 'flexible' way, and to create thousands of jobs for the construction industry.

First Steps was exemplified today with the launch of London and Quadrant (L&Q) Housing Association's 'UpToYou' scheme, which will provide 49 affordable home ownership options, particularly directed towards first-time buyers trying to get a foot on the property ladder.

A £42 million investment by London HCA will support the provision of nearly 500 intermediate rent homes, which will offer occupiers a discounted rent, at 80 per cent of the market rate, until they are in a position to buy.

Mr Johnson said: "London is taking the first major step and leading the way in tackling this housing crisis as we begin the process of helping thousands of Londoners who have been left stranded for so long in both boom time and now during the downturn.

"The money we are investing today is also a major shot in the arm for London's development sector and the economy. As this rolls out, thousands of construction sector jobs will be saved but more importantly the sector will emerge strong to build and grow London when the recovery comes.

"The property market will get going again in the next two to three years, so we've got to keep the supply going."

At a press conference today at L&Q's most recent development in Tooting, the mayor said this kind of development was essential not only for first-time buyers, but also to boost the numbers of construction jobs as a "vital initiative for construction jobs and skills".

HCA London also confirmed it will allocate a further £93 million at five stalled development sites (including Greenwich, Islington and Southwark) over the next 12 months, as part of its new £135 million strategy to kick start housing construction in the capital. This will see a further 1,500 units, with a longer term potential to provide 6,000 more, of which over a half will be affordable homes.

Sir Bob Kerslake, chief executive of the HCA, said: "We're doing everything we can to get projects moving and deliver well-designed homes for Londoners. Our flexible investment approach means we're able to respond quickly and effectively to bring forward affordable housing that would otherwise not get built.

"This funding package for kick starting developments will keep regeneration activity moving and provide the housing market with a much-needed confidence boost."

The 'UpToYou' development launched today offers buyers a rental price at 80 per cent below market level, which they can choose to buy at any time. A one bedroom property at 'Elysee' (pictured right), the development in Tooting, will cost £613 pcm, to rent including service charge, with the property valued at £165,000. A minimum share of 25 per cent would therefore be £41,250.

L&Q chief executive, David Montague, said: "The HCA's planned investment in our new package of UpToYou sites has given L&Q the confidence to start construction that would otherwise be mothballed.

"With falling property prices and mortgage approvals at an all time low, people lack the confidence and money to buy. UpToYou is a simple, flexible approach that gives the customer confidence and choice. If they prefer not to buy now, they can pay a sub market rent for as long as they wish, and save for a deposit if that's what they want to do. They can buy some of their home at a time of their choosing and pay a rent for the part they don't own."

Another development in Bromley, was also launched today, putting 36 new homes onto the market.

Brian Berry, director of external affairs at the Federation of Master Builders (FMB), said: "We welcome the initiative, particularly as it targets the plight of first-time buyers. The promised funding is a start, but actually we need 10,000 homes across London, and we still have five million on council house waiting lists in the UK. It's a great start but it's a long way off solving the housing crisis."

The Mayor was later criticised by the Department for Communities and Local Government (CLG), who said the scheme had not yet received government approval.

A CLG spokesman said: "While we welcome any steps to improve housing affordability in the capital, we are disappointed that the Mayor has prematurely announced these proposals without first securing the necessary funding approval from government.

"It is vital that we ensure any new schemes offer a good deal for London and the taxpayer and we have asked the Homes and Communities agency (HCA) to look further at the detail of this proposal so they can quickly assess whether it should go ahead."

Sarah Garrod

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